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Former CEO Michael Weiner claims plans to sue New Frontier Media

By Alicia Wallace, Camera staff writer

Posted:
10/16/2012 07:15:36 PM MDT

Updated:
10/16/2012 07:17:00 PM MDT

Michael Weiner, the former CEO of New Frontier Media Inc., said he intends to sue the Boulder-based adult entertainment media firm that he believes wrongfully terminated him, according to a resignation letter that became public Tuesday.

A day after New Frontier announced plans to be acquired for at least $33 million by an affiliate firm of Larry Flynt's L.F.P. Inc., the company made a Securities and Exchange Commission filing disclosing recent correspondence between its board of directors and Weiner.

The Oct. 10 letter from Weiner comes after a similar back-and-forth between New Frontier's board and former David Nicholas, who was asked to resign from his director position. In his letter, Weiner questioned New Frontier's lawsuit against Longkloof Ltd. - its largest investor that had put in an unsolicited acquisition offer for the Boulder firm - claiming that the move cost shareholders money and was an act of "self-preservation" on behalf of the remaining board members.

"The special committee erroneously asserted that I expressed a favorable view toward Longkloof's initial acquisition proposal and acted in an 'unusually friendly' manner towards representatives of Longkloof, the company's largest shareholder," Weiner wrote. "This was not the case and I was always open, and remain open, to fully considering any proposal that maximizes the value of the company and that would provide immediate liquidity to shareholders."

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Weiner claimed he also was kept "in the dark" about the special committee's actions, which hindered his ability to act as the company's chief executive and chairman. By writing the resignation letter, Weiner said he hoped "will help ensure that the current directors redirect their focus on preserving what value is left in the company under the watchful eyes of shareholders."

"I also intend to vigorously pursue my legal claims against the company (following my wrongful termination) to prove my actions have always been in the best interests of shareholders," he wrote. "I cannot say the same for the current members of the board."

In a reply to Weiner sent Monday, the board of directors alleged the former CEO and Nicholas sought to block the resolve of the proxy contest launched by Longkloof and subsequently further continued to "distract" the special committee from its duties.

In a reply to Weiner sent Monday, the board of directors wrote: "The frivolous and baseless litigation that you indicate in your resignation letter you are planning against the company can only be seen as attempting to disrupt this value-maximizing transaction and will only serve to deprive our shareholders of some of the potential upside that they stand to receive for their shares."

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